Press Story

The Government will have to continue ramping up investment and make our tax system fairer over the rest of the parliament, following today's budget, says IPPR.

Reacting to measures announced by Rachel Reeves, the chancellor of the exchequer, Harry Quilter-Pinner, interim IPPR executive director, said:

“Today’s budget marks a decisive, positive shift for the UK economy. By setting a course that involves higher investment than the previous government planned, and additional tax revenue to support public services, the chancellor is steering the country away from stagnation and austerity, towards a better economy.

“On investment, the chancellor has heeded our call that getting the fastest growth in the G7 will not be possible with the lowest investment in the G7. This budget marks the moment when the UK turns the tide on our low investment, low productivity, low wage economy. The focus must now be on increasing investment year on year, and spending it well, to deliver shared growth.

“Today’s tax reforms have prevented the worst of the planned spending cuts that were inherited from the previous government. But there is more work to do. A wealthy millionaire or billionaire will still be able to pay a lower rate of tax than the average nurse. And the overall spending envelope will still leave some departments with tough decisions to make.

“The new government inherited a terrible economic situation after many years of crisis and mismanagement. Today the chancellor has taken important steps towards building a better Britain. But decades of economic damage cannot be undone in one budget. This must be the start of a decade of national renewal.”

On the economy, Dr George Dibb, associate director for economic policy at IPPR, said:

“The chancellor has introduced welcome reforms to Britain's fiscal rules and charted an ambitious path for much-needed investment that IPPR has called for. This is an essential part of overcoming 14 years of economic mismanagement and stagnation.

“Tweaks to how government measures debt in its fiscal rules will open desirable space for greater borrowing to rebuild the foundations of the UK economy. This is an important, pro-growth approach that can support improving public services, address climate change and begin to address regional inequalities.

“We welcome reforms to taxes on income from wealth, including capital gains tax, inheritance tax, and carried interest. These are first steps in making the UK tax system fairer, even if some do not go as far as we would hope. The rise in the rate of capital gains tax of just 4 per cent is lower than the full equalisation with income tax IPPR have called for. There is still work to improve the fairness of the UK’s tax system.”

ENDS

Harry Quilter Pinner, Dr George Dibb and other IPPR experts are available for interview

CONTACT

David Wastell, Director of News and Communications: 07921 403651 d.wastell@ippr.org

Georgia Horsfall, Digital and Media Officer: 07931 605737 g.horsfall@ippr.org

NOTES TO EDITORS

Recent IPPR publications relevant to today’s Budget include:

- On the need to modernise fiscal rules to enable vital public investment: Budgeting better: How the UK could start to improve its fiscal framework and boost growth - https://www.ippr.org/articles/...;
- On how the UK lags other G7 economies for investment:Rock bottom: Low investment in the UK economy - https://www.ippr.org/articles/...;
- On why keeping capital gains tax low is not the best way to support entrepreneurs - https://www.ippr.org/articles/...
- On why tax rises are needed, and the trade-offs involved: Avoiding austerity 2.0: Why is the government considering tax rises at the budget? - https://www.ippr.org/articles/...;
- On how voters prioritise rebuilding public services over simply balancing the books: Bookkeepers or changemakers? Understanding the chancellor’s choices ahead of the budget -https://www.ippr.org/articles/...;
- On how some taxes can help make the UK healthier: Our greatest asset: The final report of the IPPR Commission on Health and Prosperity - https://www.ippr.org/articles/...;
IPPR (the Institute for Public Policy Research) is an independent charity working towards a fairer, greener, and more prosperous society. We are researchers, communicators, and policy experts creating tangible progressive change, and turning bold ideas into common sense realities. Working across the UK, IPPR, IPPR North, and IPPR Scotland are deeply connected to the people of our nations and regions, and the issues our communities face. We have helped shape national conversations and progressive policy change for more than 30 years. From making the early case for the minimum wage and tackling regional inequality, to proposing a windfall tax on energy companies, IPPR’s research and policy work has put forward practical solutions for the crises facing society. www.ippr.org